April 27, 2015

Overall business volume up

Washington, DC--The Equipment Leasing and Finance Association's (ELFA) Monthly Leasing and Finance Index (MLFI-25), which reports economic activity from 25 companies representing a cross section of the $903 billion equipment finance sector, showed their overall new business volume for March was $8.9 billion, up 25 per cent from new business volume in March 2014. Volume was up 46 per cent from $6.1 billion in February. Year-to-date, cumulative new business volume increased 17 per cent compared to 2014.

Receivables over 30 days were 1.2 per cent, up from 1.1 per cent the previous month and from one per cent the same period in 2014. Charge-offs were at an all-time low of 0.2 per cent for the 13th consecutive month.

Credit approvals totaled 78.7 per cent in March, up from 78.1 per cent in February. Total headcount for equipment finance companies was up 3.9 per cent year over year.

Separately, the Equipment Leasing & Finance Foundation's Monthly Confidence Index (MCI-EFI) for April is 70.7, an easing from the March index of 72.1, which was the highest level in four years.

ELFA president and CEO William G. Sutton, CAE, said: "Equipment finance companies in many industry sectors are reporting a robust first quarter of the year. The March new business volume is indicative of strong capital spending, influenced by businesses taking advantage of continued low interest rates, perhaps in anticipation of reported tightening of monetary policy by the Fed. Credit quality metrics are mixed, with delinquencies edging upward counterbalanced by monthly losses remaining at historic lows."

Bradley R. Brolsma, president, Merchants Capital Resources, Inc., said, "While there is a general sense within our industry that deal flow is not where it could be, the 17 per cent growth in first quarter new business certainly doesn't seem to bear that out. Clearly, industry numbers are outpacing 2015 expectations of a 4 to 5 per cent increase in annual expenditures for equipment and software and that's nothing but good news for our industry. That said, the rather dismal global economic numbers still point to the need for cautiousness in assessments of overall credit conditions going forward. The marketplace doesn't need any bad news or surprises right now."